Ethereum News Today: SEC Signals Shift in Crypto Stance, May Exclude Liquidity Mining as Securities

The U.S. Securities and Exchange Commission (SEC) has recently signaled a more nuanced approach to liquidity mining activities, suggesting that such actions may not fall under the traditional definition of securities offerings. This development marks a departure from earlier enforcement strategies and reflects a broader shift in the agency’s engagement with crypto assets [1]. The clarification comes amid ongoing discussions led by SEC Commissioner Paul Atkins, who has emphasized the need to bring crypto asset distributions back to the U.S. and end the “convoluted offshore corporate structures” that have long characterized the sector [3].

According to the SEC’s Division of Corporation Finance, proof-of-stake mechanisms and certain liquidity incentives in decentralized finance (DeFi) platforms may not constitute securities under current legal frameworks. This interpretation, while not a formal rule change, provides much-needed clarity for market participants who have long operated in a regulatory gray area. For instance, protocols like Linea are now experimenting with models that offer native yield on bridged assets, allowing liquidity providers to earn returns without external token incentives, potentially aligning with non-security definitions [4].

The SEC’s stance, however, remains unconfirmed in official records, leading to confusion among stakeholders. While some reports suggest the SEC has moved to classify liquidity mining as non-securities, no definitive statements have been made on official government websites or through the Federal Register [1]. This discrepancy raises concerns about regulatory uncertainty in the DeFi sector, which could impact project development, investor confidence, and market behavior [2].

Despite these ambiguities, the broader regulatory environment appears to be evolving in favor of clearer, more structured engagement with digital assets. Recent developments, including the European Banking Authority’s guidance on crypto liquidity characteristics, further highlight the growing divergence between traditional finance and blockchain-based systems [5]. These shifts may encourage more institutional participation and structured investment models in the DeFi space, particularly for protocols that can demonstrate transparent governance and yield mechanisms.

The timing of the SEC’s comments is also significant, given the pending outcome of the Ripple vs. SEC lawsuit, which is expected to conclude by August 15, 2025 [6]. A favorable ruling in Ripple’s favor could reinforce the SEC’s apparent shift in strategy and provide a clearer legal precedent for crypto asset classification. However, liquidity mining remains a complex area, and stakeholders should continue to monitor regulatory developments closely.

As Ethereum’s price recently surged by nearly 100% over 90 days, hitting $3,602.15, market dynamics underscore the importance of regulatory clarity in supporting long-term growth and stability in the crypto ecosystem [1]. Investors and project teams alike are now navigating a landscape where innovation and compliance must move in tandem, and the SEC’s evolving stance may serve as a catalyst for both.

Source:

[1] The Day the SEC Quietly Surrendered to Crypto (https://cryptoadventure.com/the-day-the-sec-quietly-surrendered-to-crypto/)

[2] CLS Blue Sky Blog (https://clsbluesky.law.columbia.edu/)

[4] Linea Boosts DeFi with Sustainable Native Yield on Bridged ETH (https://www.cointrust.com/news/linea-boosts-defi-with-sustainable-native-yield-on-bridged-eth)

[5] Final Report - European Banking Authority (https://www.eba.europa.eu/sites/default/files/2025-08/616d6b06-cdcf-4246-a7cc-2173dfd32fa6/Draft%20RTS%20on%20crypto%20asset%20exposures%20Article%20501d-5.pdf)

[6] Ripple-SEC Lawsuit News: Ripple Inches Toward Final Verdict as August 15 Deadline Looms (https://bravenewcoin.com/insights/ripple-sec-lawsuit-news-ripple-inches-toward-final-verdict-as-august-15-deadline-looms-and-new-xrp-price-prediction-emerges)